Financial stress is a condition that has to do with worrying about money, which ends up affecting the mental and physical health. It can begin with incidents like losing your wallet on the street, getting a bill that wasn’t expected, a customer paying late, or running out of money in personal accounts.
One of the issues that troubles business owners the most is the lack of liquidity, which has caused many SMEs to suffer by making it difficult for them to pay off debts, carry on with operations, and deal with high inflation rates. This might cause entrepreneurs who started a project stress and cause them to make poor judgments that have an adverse effect on the company.
Signs of financial stress
The first thing to do to prevent financial uncertainty from ending your company is to identify the signs of this type of stress. If you find yourself in any of the following situations, it is possible that you will suffer from it or are close to facing it. Take note and analyze your situation.
Constantly asking for money
The constant search for loans and credits is an alarm signal, since it means that there is a rush to obtain financial resources on a regular basis, something that, if the company had stability and a good financial plan, would not be necessary.
Reduce expenses that are necessary
Reducing unnecessary expenses is a good measure to take care of liquidity, but if said reduction affects what is necessary for the daily operation of your business, such as real estate or raw materials, that means that business finances are not working. good.
Payment defaults
If you cannot pay your suppliers or lenders on time, this not only results in your project adding debt, but also the image of the venture is affected, a bad history and a low credit score are generated.
Pay credit with credit
One of the unequivocal signs of imminent stress is seeking financing sources for SMEs, in order to pay other previously requested financing. Paying debt by generating a new debt is a measure that can turn out badly, and speaks of poor resource management.
What can be done to avoid financial stress?
If financial uncertainty causes you stress, do not let it make you make desperate decisions, and better apply these measures:
- Identify the cause: if you start to lose control over your resources, find out about the origin of that, so that you can focus on solving the problem, whether it is, for example, eliminating or reducing unnecessary expenses, avoiding mixing personal finances with business finances, or accumulating many debts.
- Manage money the right way: start keeping track of your income and expenses. Be aware of your debts, keeping a list of bills to pay, and better manage the expenses that are incurred for the operation of the company, cutting those that are not necessary.
- Save part of the income: with good administration you can save little by little, until you have a solid emergency fund that you can use for any unforeseen event that arises, or have a box with sufficient resources for any emergency situation.
- Seek help: inquire about sources of financing for SMEs, which do not turn out to be more of an obstacle than a solution. Analyze options that have flexible terms and a low interest rate, which allows you to solve financial problems and not accentuate them.
Integrate the MCA into your financial plan
One of these sources of financing is the Merchant Cash Advance (MCA) or cash advance, an alternative for quick resolution and immediate availability of resources. In addition, the loan payments are very versatile, since they depend on the sales of the company, and an advance fee that does not represent a high interest rate like that of traditional credits.
This type of financing is offered by Pymes Capital, and to obtain it you only have to fill out the form on the website, and in a very short time you will have an answer. Do not stress about lack of financing, you have the opportunity to maintain and promote your project with Pymes Capital.